<p>
[quote]
So I'm guessing that for FAFSA purposes she is not a dependent, but it is possible that she is for IRS purposes???
[/quote]
As long as she is under the age of 24, or earned less than $3,500 that would be orrect.</p>
<p>Sounds like a dependent for tax purposes to me.</p>
<p>I have a question similar to anxiousmom’s and the IRS publications are making me crazy. If anyone can help, I’d appreciate it. My son graduated from college in May 2008 and I am claiming him as a dependent one final time because he was a full-time student "during some part of each of any 5 calendar months of the year." Since August, he has been teaching in Macau on a 10-month fellowship (which he received through his college, but is not degree-related). He is paid by the university in Macau, not by his American alma mater that sponsors the fellowship. Is this income taxable? Should he be reporting it when he files? If so, how? He is paid in the local currency, not American dollars.</p>
<p>If he is a U.S. citizen or resident, then he is required to file a tax return if he made over $5,450 in 2008 if you claimed him. If no U.S. taxes were withheld then he will have to pay when he files.</p>
<p>^Thanks. So we would find and use the Macanese pataca-American dollar exchange rate as of December 31st to determine how much he made in U.S. dollars?</p>
<p>Synopsis: Good Luck. Make it his problem. </p>
<p>All money from all sources, is taxable. To what degree that the money is taxable is the question. I won't bother you with the citations, gives me headaches too. </p>
<p>We cut our son off on all family programs when he finished his degree, Dec 15, 2007. He also had an assignment to do overseas work, paid in local currency, US sponsored company, with an affiliate in that country. 2008, he's had three overseas income work, that was related to academics. </p>
<p>Recognize that the problem that we have is that I have fewer brain cells, slower comprehension skills, and the stupid instructions is written only for younger people to decipher. I took the attitude, His money, His problem. </p>
<p>File for tax filing extension before April 15. Alternatively, if your S is outside US on April 15,, he automatically qualifies for , BUT when he does file, WRITE the Reason for late filing, at the top of 1040. A separate page explanation will not be seen and flagged (by DS experience)</p>
<p>Thanks for the tips, LongPrime. Very soon, we will be cutting him loose in terms of his being responsible for his own tax preparation, but since we are claiming him as a dependent for 2008, I thought I’d provide as much help as I could this time around.</p>
<p>We did the same in his last year of dependency. We had Canada as the foreign country. I eventually gave the problem to a big local CPA firm, who sent the US info to India, and the Canadian portion to a Canadian CPA firm. I was not happy (prep fees $3000). </p>
<p>The following tax year, DS did his own, using methodogy info from the previous year. 2008 tax year will be very challenging-he will spend considerable time figuring this out. But what's a smart kid gonna do?</p>
<p>Mary13, My DD is being paid by her college to study and learn this year; she got a scholarship. I'm guessing that money is considered earned? Since she is only temporarily in her country abroad, she can't claim the first $80,000 (what $80,000?) tax free. Here's a link for anyone interested in tax rules for earning money abroad: Even</a> overseas, you can't escape the IRS - MSN Money
And I'm happy to have DD do her own taxes; just trying to figure out if she is a dependent this year since it is not clear how to figure how much support I gave her. Include percentage of health insurance coverage?, cell phone?, room and board charges for the time she was at home?, car usage and gas??? What do you guys think? What do you include when figuring out how much support you paid?</p>
<p>anxiousmom - My understanding is that your daughter would qualify as your dependent simply because she was a full-time student for any part of five months during 2008. Since that is the case, you would not have to sit down and calculate the other ways in which you contributed to her support—her full-time student status makes it a “done deal.” On the FAFSA application, however, she would be considered an independent student since she has already completed her undergraduate degree. </p>
<p>According the the IRS website, the scholarship income she is currently earning would be taxable because she is not a degree-seeking student.</p>
<p>Publication</a> 970 (2008), Tax Benefits for Education</p>
<p>Just for fun.
S current internship: Germany, U of Potsdam. Has him as a nondegree seeking pHd student, visiting researcher. His MS professor, Toronto, has him listed as a pHd student on leave-of-absence.</p>
<p>
[quote]
her full-time student status makes it a “done deal
[/quote]
Not true. Parents still have to provide more than half the student's support. Full time student status is an exception only for the income rule. If a child over the age of 19 earns more than the standard exemption amount ($3,500 for 2008) the parents can't claim them unless that child is a full time student under the age of 24. Assuming they meet all other rules.</p>
<p>Thanks for the clarification. In our son’s case, we paid his tuition, room and board, books, clothes, etc. from January to May, and then he lived with us after graduation until he left for Macau in August. So it was a pretty short leap to figuring out that we had paid more than half his support during the year. The situation might be different for anxiousmom and her daughter.</p>
<p>Make sure you differentiate between a Qualifying Child and a Qualifying Relative.</p>
<p>If you are claiming your child, who is a full-time student under age 24, neither the gross income test NOR the support test applies.</p>
<p>In other words, a Qualifying Child can have unlimited income. The parent does NOT have to provide > 50% support; the parent just has to make sure that the child does not provide > 50% toward his/her own support. Ignore scholarships received in the support test.</p>
<p>There have been cases where the IRS looks at the income of the "child" and decides it's too high for the parent to have claimed them. In the past, this has hovered around $15 - 20K. So I wouldn't say the income can be "unlimited". If your child graduates from college and starts at some great firm making $60,000 it's going to be hard to prove they didn't provide more than half of their own support.</p>
<p>Income CAN be UNlimited for a Qualifying Child.</p>
<p>Child can invest earnings and not use own income. The child will still have to prove that he/she didn't contribute >50% toward his/her own support.</p>
<p>Just think of all the child actors who were claimed as dependents by their parents.</p>
<p>Newhope33, this may be the stimulus package quirk to which you refer (section #1 Recovery Rebate Credit) <a href="http://finance.yahoo.com/taxes/article/106504/New-Tax-Perks-You-Don%27t-Want-to-Miss%5B/url%5D">http://finance.yahoo.com/taxes/article/106504/New-Tax-Perks-You-Don%27t-Want-to-Miss</a></p>
<p>Wow, as if we needed any more complication in our financial lives. Thankfully I don't qualify for any of those Stimuli ... but thanks for suggesting them!</p>
<p>I’ve been using TurboTax online for years, but am officially fed up with their constantly crashing website. (It’s down again today.) I’m ready to try a competitor, but am hesitant to simply choose one blindly from the long list of e-file vendors on the IRS website. Any suggestions?</p>
<p>I use TurboTax out of the box. I tried the online one year, but I had trouble with it also. You have to connect to the internet to update and to file, but otherwise, I only to have to worry about my own computer crashing (ooh--oh, I hope I didn't jinx me).</p>